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to the public that they were liquid to a high degree. That has the result that many of our commercial institutions to-day are advertising 50, 60, and 70 per cent liquidity.

Our savings banks are in the same condition. In getting their statements at the first of this year, savings banks have shown from three to five times as much cash on hand and in many instances from two to four times the amount of Government bonds they usually hold, just to keep themselves in a liquid position. They are not making any loans, and they are getting payments wherever possible and demanding curtailments on their present mortgages.

I want to say this for the Massachusetts banks. They have been very fair to the borrowers. If they could not pay, they have tried to carry them along, but it has been a question of nervous tension on the part of the borrowers there.

We in our mortgage department started a campaign about three months ago, figuring there was a lot of distress property on the market for sale. We selected a large list of people who were still employed and very certain of their positions, feeling that those people ought to be ready and anxious to take up some of these properties that were on the market for sale, for homes. In many cases, in fact it was practically unanimous, they were so afraid of short-time mortgages that they did not want to take over the purchase of a home, even when they could buy it at a considerable discount at this time.

If this bill passed and our banks could take-our savings banks used to make from one to three year mortgages-reasonable term mortgages and feel safe of the opportunity of making their mortgages liquid in time of need, my opinion is that it would increase the purchasing of homes.

We have heard a lot about oversupply of homes. Three weeks ago we put our men out to make a survey, and I will give you a few figures. Boston is strictly a commercial city, very limited in its area, but made up of a large number of suburban subdivision. Boston proper has about 800,000 population, and within 10 miles of the center of Boston we have a population of nearly 2,000,000, made up of the small towns and small cities, running from 10,000 to 100,000 people, in the different communities.

We took sections where they had modern homes, and we completed surveys in these towns. We did not go into the poorer and unimproved sections. Out of 2,468 families in the town of Arling. ton—that town has a population of about 15,000—there were 59 vacancies, or 2.5 per cent, which does not show an overproduction. That does not take into consideration huddling or the doubling of families, of which we know there are many.

We went into the city of Cambridge, which has something over 100,000 population, and which has many apartments. There we found a different condition. Out of 5,595 family apartments or homes or single houses, there were 383 vacancies, or 6.8 per cent. But that is to a large extent in the multiple apartments, not in the single and 2-family houses.

In the town of Belmont, out of 919 homes we found only 29 vacancies, or 3.15 per

cent. In the town of Watertown, out of 2,093 homes, we found 64 vacancies, or 3.06 per cent.

We in the real-estate business consider if we do not have a 5 per cent vacancy we are not facing an over-supply, and that is not taking into consideration huddling or doubling up.

Senator Watson. How many foreclosures have you had?
Mr. NORRIS. We have had a great many foreclosures.
Senator WATSON. A great many?

Mr. NORRIs. They are increasing and have been for the past three years. New England has been in better condition than many other sections of the country during the past two years. That was especially true up until the past six or eight months, because our shoe and leather industry and our textile industry had been through a serious depression back when the rest of the country was prosperous, and ex panding, so we were not faced there with a curtailment. Our textile industry has actually improved in the past two years somewhat, and our shoe industry in the past year was better than it has been for some time. When this crisis which has been spreading through the country reached New England, through fear hoarding began, and some bank failures came on, which were to a large extent due to hoarding and not to the instability of our institutions. We had not had a great deal of trouble in the commercial banks, but in our savings banks and in our cooperative banks we had had many foreclosures, due to many things. A lot of them came on when the banks began to see this thing coming and commenced to endeavor to force payment on mortgages that the people could not take care of.

We do not have a large amount of insurance company money in Massachusetts. The Metropolitan Insurance Co. came in there, but their loans are too expensive. They do not loan themselves to the home buyer. They have limited themselves in most cases to 50 per cent.

Senator Watson. What is your limit?
Mr. NORRIS. The savings bank

loan is 60 per cent and the cooperative banks generally go to 70. They are permitted to go to 80, but I know that our own cooperative bank never figured on going over 70 per cent. There is a very small percentage of the cooperative bank mortgages that are not worth every dollar that has been loaned on them. It is just a question of their being able to keep up the payments during this period.

Senator Watson. About what is the average loan on homes?

Mr. Norris. The average loan on homes in metropolitan Boston would run about, I would say, from five to eight thousand dollars. Cooperative banks do not loan over $8,000. Those people owning homes of that kind, of that size or value, are the ones that really need this help.

Here is something we are going to find, if you do not give us relief through this act and make mortgages more liquid. We are going to find that savings banks and commercial banks who have experienced the frozen character of real-estate mortgages during this period, are not going to be as free to make mortgages on real estate in days to come, and even though prosperity returns the home owner and the home buyer is going to experience difficulty in securing proper financing for his home. We all know this, that the backbone of our American public is the home owner.

Senator Watson. You favor this bill, do you?
Mr. NORRIS. Strongly.

Senator WATSON. Have you studied it thoroughly so as to satisfy yourself that all of its provisions are sound?

Mr. NORRIS. Beg pardon?
Senator WATSON. All of its provisions ?

Mr. NORRIS. We went through that bill very thoroughly, and as I say, we had several of our savings banks

Senator BULKLEY. Who do you mean by “we”?

Mr. NORRIS. The Boston Real Estate Board, the board of directors, as I submitted their vote there. We took the bill up and went through it with our banks. Each one had several suggestions of a more or less minor character, all of which will be ironed out in its administration. I do not think that a bill can be taken up but what each individual has some suggestion he can put into it.

We heard this morning a telegram read from Mr. Preston Cotten, of Boston, Mass., representing a title and mortgage company. They do not loan on homes to any extent. I know Mr. Cotten and I know his institution and I know that most of their loans are on large apartment houses and commercial properties to a very large extent, so I do not think Mr. Cotten is in a position to judge as to whether we have an oversupply of homes or not. He is a very estimable gentleman, but I think he just gave his impression, because in offices and high-priced apartments we have an oversupply. In the moderate-priced apartments throughout Massachusetts we have not any oversupply.

Senator BULKLEY. Did Mr. Cotten say there was an oversupply!

Mr. NORRIS. As I understood his telegram this morning, he considered that this bill was not necessary because we had an oversupply of homes.

I think that covers everything that I had to say or everything that has not been covered by other people.

Senator Watson. Thank you very much, Mr. Norris. Mr. J. F. Brownlow.

STATEMENT OF J. F. BROWNLOW, KNOXVILLE, TENN. Senator Watson. Where do you live, Mr. Brownlow?

Mr. Brownlow. Knoxville, Tenn. I am here representing the real estate boards of the State of Tennessee and the State association.

Senator WATSON. Real estate dealers?
Mr. BROWNLOW. Yes, sir.
Senator WATSON. You have a board, do you?

Mr. BROWNLOW. Each city has. We are part of the National Association of Real Estate Boards which Mr. Nelson spoke of here this afternoon.

Senator WATSON. What is the object of the association?

Mr. BROWNLOw. The objects of the association are to establish the real estate business on a higher plane than it was formerly. We have a code of ethics which practically abolishes the doctrine of caveat emptor, and if a member violates the code of ethics he is presumably expelled from his board.

Senator WATSON. I would like to see the code of ethics.

Mr. BROWNLOW. Mr. Nelson has probably got one with him. I will be glad to put it in the record. I had the pleasure of applying it, Senator, during two terms as real estate commissioner of the State We applied it both fore and aft, and there are several gentlemen there now who were formerly real estate agents in the State of Tennessee.

Senator WATSON. Who are now seeking employment? Mr. BROWNLOW. They were seeking it prior to the depression. You can not do business in our State without a license.

Senator WATSON. That is, a license to deal in real estate! Mr. BROWNLOW. Yes. They must conduct their business along ethical lines. For instance, we prevented the sale of Muscle Shoals lots in Tennessee. A lot of them were sold up in Indiana and Michigan.

Senator WATSON. You were not interested in Florida, were you?

Mr. BROWNLOW. No, sir. As a matter of fact, we prevented the sale of most of the Florida properties in Tennessee also. They have to sell those things through the United States mails or else go out of the State to do it.

Senator WATSON. How long have you been organized in Tennessee?

Mr. BROWNLOW. Our real estate board, the Knoxville board, has been organized, I should say, 25 years.

Senator Watson. You represent the board in Knoxville?

Mr. BROWNLOW. I represent all of the boards in Tennessee and the State association.

Senator Watson. Mr. Brownlow, will you give us your impression of this bill and how you arrived at that impression?

Mr. BBOWNLOW. The real-estate men of Tennessee are, I should say, unanimously for this bill. I do not know of a single realtor in the State who is not in favor of the bill. My speech is brief.

Senator Watson. Go right ahead.

Mr. BROWNLOW. I am going to try not to repeat what many other gentlemen have said here. I think many of these points have been brought out.

Senator WATSON. That is all right.

Mr. BROWNLOW. I am going to refer to a few points that occurred to me, that I have noted here.

I want to call the committee's attention to the excessive depreciation of single-family dwellings at the present time. Normally we can figure on a certain number of single-family houses passing out through lack of repair and obsolescence. Under these depressed times people are not painting their homes, they are not repairing their roofs—they simply haven't the money. Many renting houses in my town have got to the point where for lack of repairs it is probable that when prosperity returns that it will be better to tear the houses down than try to repair them. Therefore, I think we can estimate a far larger percentage of old homes passing out of existence than we have had in the past, simply for that reason.

Senator Watson. You are speaking now of homes?
Mr. BROWNLOW. Homes; yes, sir.

Senator Watson. What per cent of the people permit their homes to be sold for mortgages or go into decay to buy automobiles !

Mr. BROWNLOW. I will be glad to answer that as far as Knoxville is concerned, Senator. We have a State highway patrol in Tennessee that arrests—and it is very effective after the 1st of February every driver who has not a 1932 license. Our licenses are supposed to be taken out prior to the 1st of January. We give them 30 days' grace. If a citizen appears on the street with a 1931 license after February 1, he is arrested. Our licenses issued in Knox County for automobiles last year were a little over 26,000. On the last day of January, the last day of grace, there had been only 14,000 licenses issued. Automobiles are stored away waiting until the owner can buy licenses.

Senator WATSON. That shows they are hard up, then.

Mr. BROWNLOW. Very hard up. We are all Republicans down there, too, Senator. That is one of the worst features of it. My congressional district has not gone Democratic in 100 years. Just 100 years ago this year we gave a majority for Andrew Jackson for President.

Senator Watson. The only difference is that you will have to walk to the polls this time instead of riding.

Mr. BROWNLOW. Yes, sir. There is one feature of the discussion that I have not heard any gentleman speak of. Possibly I am all wrong about it, but it is just an idea of my own. I think there are a great many people who are hoarding money. I know they are in my town. They are hoarding it because they are a little bit afraid of the banks and they have not any other place to put it. I think many of these people who have two or three thousand dollars or $10,000 saved up are not going to be interested in buying the debentures of this home loan bank at all. We are used to a little bit better interest than eastern cities. They want 6 per cent down there. I believe when this bank is working and the local banks, or the financial institutions that can send their mortgages up for discount, do so, many of our people will go into these institutions and say that they will be glad to buy a mortgage which is eligible for rediscount. “What size mortgage do you want?” “$3,000 or $5,000. I will feel safe if the home loan bank will take it.” Promptly that financial institutions sends up a new mortgage, substitutes it, and pulls down the old which is sold to the local investor, and there never will be any sale of debentures against that particular mortgage. It will be taken up locally, and it will bring a great deal of money out of socks and safety deposit boxes. I feel very certain of that.

Senator WATSON. Do you think these bonds will sell readily!

Mr. BROWNLOW. I don't know. I do not pretend to be in the bond business.

Senator WATSON. You are not in the bond business?

Mr. BROWNLOW. No, sir. My office makes no loans at all. We don't handle loans. We got out of that business many years ago.

As regards the necessity for the permanency of this bill, let me say that my city has suffered not only in the depression that is, not only as the mortgage market suffered, but we have suffered in times in boom. Automobile stocks many years ago were great things for people to put their money in, then came radio stock, and then the 1928–29 stock market. Our money which was normally invested in mortgages went out of mortgages. Our source of mortgage money has dried up and contracted very materially in boom times. For that reason I don't believe that the law ought to be merely an emergency measure.

I would like to say something about the insurance companies now, and I want to preface it by saving that I do not want to inject any chamber of commerce stuff in the record. Knoxville, Tenn., had

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